More on “Incentive Auctions” for the Reallocation of Spectrum

Some of our readers have requested me to write a bit more about “incentive auctions”. A couple of additional lines in this interesting topic follow.

The US Federal Communications Commission (FCC) has recently proposed the use of “incentive auctions” for the reallocation of radio spectrum from broadcasting to telecommunication services. According to the FCC, this process of reallocation will be instrumental to solve, at least partially, the “spectrum crunch” that the US economy will be facing during the coming years. The incentive auction mechanism that the FCC is proposing to implement is based in two core principles: (a) the voluntary return of spectrum by broadcasters in exchange for a share in the revenues generated by the public auction of this spectrum and, (b) the non-voluntary repacking (band relocation) of all the broadcasters that operate in the spectrum band targeted. One of the key features of the FCC proposal is that any costs associated with the process of band relocation will be paid directly by the government. The FCC mechanism for the repurposing of radio spectrum is particularly innovative, although some questions still remain to be solved. On the one hand, it is clear that the revenue sharing coefficient between broadcasters and the Federal Government cannot be efficiently determined, ex ante, to the auctioning process. However, the fact that there is some degree of uncertainty about revenue sharing may reduce the power of the incentives given to broadcasters for participating in the incentive auction in the first place. On the other hand (and depending on the number of operators that enter regionally into this mechanism), there is a risk that the process of repacking will lead to different band plans across the country, which may impact the cost of providing services across regions.

Incentive auctions are quite a hot topic now in the US telecommunications policy. It would be interesting to analyze some of the challenges that the implementation of incentive auctions may raise in the context of the Latin American economies.

Relacionado

Dear Victor,
Your last sentence is particularly interesting! In Brazil, the privatization of the telecom companies had the sole purpose of generating high revenues to the government to deal with the public deficit. As a matter of fact, this approach has always been the main focus of all the privatization policy in Brazil, even though no one involved would admit it. I suspect this has just recently changed.
Specially in the telecom industry, the design of pro-competitive regulation ex ante may lead to considerable gains in the welfare. Of course, this would come at the expenses of lowering the price of the assets. This seems to be what the US government is planning to do.
Do you think this would work in Latin America? What about the other readers? Any views to share?
Regards,

Angela Zhang, Kings College discusses Private Ordering in Chinese Antitrust. ABSTRACT: This Article begins with an inquiry into why there is a rarity of private challenges of decisions made by the Chinese antitrust authorities. The legal approach to the study...

Ioannis Lianos, UCL describes Global Governance of Antitrust and the Need for a BRICS Joint Research Platform in Competition Law and Policy. ABSTRACT: In May 2016 the BRICS competition authorities signed a Memorandum of Understanding (MoU), which puts in place...

When discussing mergers, both Commission officials and private practitioners often characterise these as a “N to N-1”. We all regularly talk and hear about “6-to-5s”, “5-to-4s”, “4-to-3s”, “3-to-2s”, and even “2-to-1s”. This blog discusses the growing view that within the Commission, a “4-to-3 or fewer” distinction has become a corridor-talk presumption of […]

On 1 December 2016, the UK Competition and Markets Authority (“CMA”) obtained a novel “disqualification undertaking” from Daniel Aston, the managing director of online poster supplier Trod Limited, whereby Mr Aston agreed not to act as a director of a UK company for five years. Trod had previously been fined £163,371 for agreeing with a... Continue reading T […]

The second part of the blog on the FCO’s background paper on “Competition and Consumer Conduct – Conflict or Parallelism between Consumer Protection and Antitrust Law?” covers the interplay between consumer and competition protection and their legal tools in practice, including recent and potential future developments. (For the first part on the general prin […]

There has been much speculation about what a Trump presidency will mean for antitrust enforcement at the Antitrust Division and Federal Trade Commission. Much of the wonder is about whether Trump will take an activist approach he suggested during the campaign, for example, when he said he thought Amazon had “a huge antitrust problem” and... Continue reading […]

Long-stalled efforts proposed by some federal lawmakers to bring “reform” to the FTC will likely be reintroduced in the 115th Congress. With a Republican majority in both the House of Representatives and Senate, and President Donald J. Trump in the White House, measures that could not get sufficient support in in the current Congress and... Continue reading […]

The Antitrust Writing Awards (AWAs) are a joint initiative between Concurrences Review and the George Washington University Law School. Nominations for the 2017 AWAs are now open. For the 6th consecutive year, Concurrences Review has brought together an impressive jury panel consisting of antitrust enforcers, professors, and in-house counsels to select the B […]

December 8, 2016 I receive quite a few inquiries about how the Competition Bureau (Bureau) works, what kinds of claims can be made under the Competition Act and how to report potential competition law violations to the Bureau (and what remedies are available). One topic I find I am increasingly discussing with both potential clients […]

December 7, 2016 Earlier today, the Competition Bureau (Bureau) announced that Moose Knuckles has entered into a settlement to resolve alleged false or misleading “Made in Canada” claims relating to its down-filled parkas (see: Competition Bureau resolves Made in Canada advertising concerns with Moose Knuckles and Consent Agreement). Moose Knuckles has agree […]

November 23, 2016 My friends at Concurrences have announced that nominations are now open for their 2017 Antitrust Writing Awards (details and links for submissions below). ___________________ The nominations for the 2017 Antitrust Writing Awards are open. The present Call for Nominations concerns 3 types of publications: Best Articles: Articles published or […]

By Monika Hasbún* Understanding the basics Intellectual Property (IP) refers to creative work which can be treated as an asset or physical property. This creative work can be represented in a variety of forms, such as inventions and literary and artistic work. Symbols, names and images used in commerce are also part of it. In […]

By Luis Pablo Cóbar Benard* Guatemala, October 17 2016 At some point it can become difficult to write a decent article, without taking the risk to sound boring, especially if it is a subject that has been widely addressed in its most important aspects. Such is the case of the status of the approval of the Competition […]

By Carmen Ortiz* Introduction Technology enabled the flourishing of the sharing economy both in developed and in developing countries.[i] It is characterized as an innovative system of collaboration between peers through an online platform accessed through smartphones.[ii] Services, goods, spaces, and others that are in surplus are offered for lease or sale […]